RT Journal Article
SR Electronic
T1 Comparing Financial and Charitable Techniques for Disposing of Low Basis Stock
JF The Journal of Wealth Management
FD Institutional Investor Journals
SP 37
OP 46
DO 10.3905/jwm.2002.320424
VO 4
IS 4
A1 Scott Welch
YR 2002
UL https://pm-research.com/content/4/4/37.abstract
AB Despite the market turmoil over the past twelve months, and corresponding dramatic fall in the price of most stocks, concentrated, low basis stock positions continue to constitute a significant percentage of the net worth of many investors and families. The author starts with the observation that holding a concentrated stock position is a risky proposition. However, once the decision has been made to reduce the concentration in a single stock, the next decision relates to the selection of the most appropriate strategy to implement the decision. The author observes that the correct strategy is rarely an “all or nothing” approach, but rather a combination of the various techniques available. These different techniques can be broadly categorized into “financial” or “charitable” strategies. The article summarizes several of the more popular ones, and develops a template for determining the appropriate strategy for a given investor situation.